Amgen vs. Vertex Pharmaceuticals: Which Healthcare Stock Is a Better Buy for 2027?

Investors looking for stability in the healthcare sector often compare Amgen (NASDAQ:AMGN) and Vertex Pharmaceuticals (NASDAQ:VRTX). Choosing between these two industry leaders requires balancing diversified income against high-growth specialization.

Amgen offers a broad range of products across oncology and rare diseases, providing a steady business model. Vertex Pharmaceuticals focuses on transformative treatments for specific genetic conditions, yielding high profitability. Both companies represent different ways to play the ongoing innovation in the medical field.

The case for Amgen

Amgen discovers and manufactures medicines for a wide array of serious diseases, ranging from inflammation to oncology. It sells primarily to three large distributors, McKesson Corp. (NYSE:MCK), Cencora Inc. (NYSE:COR), and Cardinal Health (NYSE:CAH), which accounted for nearly 77% of its revenues in 2025. Customer concentration like this adds a layer of risk to the business, though it also simplifies the logistics of its global distribution network.

In the 12 months ended Sept. 30, 2026, revenue reached approximately $38.9 billion, representing growth of roughly 8.3% over the prior period. The company generated net income of nearly $9.4 billion during this same time frame. This growth reflects the continued expansion of its core portfolio and its strategic push into new markets like China and Japan.

As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 6.3x. This ratio measures leverage by comparing total debt to shareholder equity, showing that Amgen uses significant borrowed capital to fund its operations. The current ratio, which measures the ability to pay short-term obligations, was close to 1.1x, while free cash flow for the fiscal year ended Dec. 31, 2025, reached roughly $8.1 billion.

The case for Vertex Pharmaceuticals

Vertex Pharmaceuticals is a leader among biotech stocks, known for its dominance in cystic fibrosis treatments. It has successfully expanded its focus to include sickle cell disease through its joint development of Casgevy with CRISPR Therapeutics (NASDAQ:CRSP). The company also utilizes out-licensing arrangements for other candidates with partners like Zai Lab (NASDAQ:ZLAB) to maximize the reach of its intellectual property.

In the 12 months ended Sept. 30, 2026, revenue reached about $13.0 billion, which indicates growth of approximately 10.8% compared to the previous year. Net income for this period was around $4.0 billion. These figures highlight the strong demand for its specialized therapies and its ability to maintain high margins in niche medical markets.

As of its December 2025 balance sheet, the company maintained a very conservative debt-to-equity ratio of roughly 0.1x. This low level of debt relative to shareholder equity provides Vertex Pharmaceuticals with significant financial flexibility. Its current ratio was approximately 2.9x, and it generated free cash flow of nearly $3.2 billion during the fiscal year ended Dec. 31, 2025.

Risk profile comparison

Amgen faces substantial competition from biosimilars and generics, which can erode the market share of its older products. It also deals with intense pricing pressure from payers and pharmacy benefit managers, alongside regulatory risks from the Inflation Reduction Act. Operational risks include a heavy reliance on specific manufacturing facilities in Puerto Rico and California, as well as ongoing tax disputes with the IRS.

Vertex Pharmaceuticals carries significant risk due to its revenue concentration in cystic fibrosis medicines, making it vulnerable to any new competitive entry in that specific field. Commercializing complex new therapies like Casgevy involves high manufacturing costs and operational complexity. Additionally, the company faces uncertainty regarding the clinical development of its pipeline candidates and the ever-present pressure from government health programs to lower prices.

Valuation comparison

Amgen appears to be the more affordable option for value-conscious investors based on its significantly lower Forward P/E and P/S ratio.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

Which stock would I buy for 2027?

Vertex Pharmaceuticals continues to benefit from its focus on cystic fibrosis (CF). It recently launched Alyftrek, a once-daily, next-in-class, triple-combination CF regimen. The treatment is seen encouragingly by investors. Alyftrek marks a notable improvement to the twice-daily dosage of Vertex's other CF products and was approved in Australia, New Zealand, Switzerland, the European Union, the U.K., and Canada over the course of 2025, after the U.S. approved it in 2024. Plenty more jurisdictions are evaluating the treatment today. In the U.S., label extensions (the expansion of FDA approval for use) mean Vertex can treat 95% of people with cystic fibrosis in the country today.

Vertex has expanded into treating other conditions. Povetacicept, an investigational recombinant fusion protein therapeutic, continues to show best-in-class potential as a treatment for three chronic autoimmune diseases: IgA nephropathy (IgAN), primary membranous nephropathy (pMN), and generalized myasthenia gravis (gMG). The FDA has granted its Breakthrough Therapy Designation for IgAN, with potential approval by Nov. 30 this year, as well as Fast Track Designation for pMN. If approved across the IgAN, pMN, and gMG indications, peak annual sales could reach $4 billion to $7 billion, according to equity analyst firm Argus.

For fiscal 2026, Vertex sales should rise about 10% to $13.3 billion, with net income coming in roughly even with 2025.

Amgen is not a fast-growing company by sales, but, given its scale, it should be able to achieve a roughly 3% revenue increase in 2026, to around $37.8 billion. Such size forgives a lot with slower-growing pharmaceutical businesses. For one, its billions in net income could enable Amgen to pursue future growth by acquiring other drugmakers. The business also has six drug franchises that generate $1 billion-plus in annual revenue. There is real value there.

Late last year, Amgen became one of nine companies to reach a deal with the U.S. government to lower drug prices (Bristol Myers Squibb (NYSE:BMY), Merck & Co. (NYSE:MRK), and Gilead Sciences Inc. (NASDAQ:GILD) are also among the companies that signed a deal). Based on this agreement, Amgen will be exempt from Trump's pharmaceutical tariffs for three years, a positive, in exchange for the company reducing prices on its key migraine drug Aimovig and rheumatoid arthritis medicine Amjevita by about 60% and 80%, respectively, in a direct-to-consumer platform launched in October.

Vertex is growing faster, revenue-wise, and while it comes at a premium compared to Amgen, its CF franchise and product pipeline, including Povetacicept, make it the most promising stock for long-term investors.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, Bristol Myers Squibb, Gilead Sciences, Merck, and Vertex Pharmaceuticals. The Motley Fool recommends McKesson. The Motley Fool has a disclosure policy.